Private Equity Firm Centre Street Launches Real Estate Services Platform

Private equity firm Centre Street Partners (CSP) announced Tuesday that it has launched Accretus, an acquisition and operations platform for real estate businesses.

In addition, CSP announced that Accretus has acquired its first company, 1031 exchange services firm Atlanta Deferred Exchange (ADE).

Former BlackRock technology executive Adam Friedman will be the new CEO at ADE, as well as of CSP-funded Accretus. Prior to joining Accretus and ADE, Friedman was most recently director of the AI and analytics engineering team at BlackRock.

Founded in 2022, Manhattan-based CSP describes itself as a boutique lower-middle-market PE firm that focuses on acquiring businesses with earnings before interest, depreciation, debt and amortization between $1 million and $5 million in the business services sector. The company then leverages venture-caliber technology and AI to grow the companies organically.

“Centre Street Partners is announcing the launch of Accretus, our first fund-to-portfolio platform in the real estate transaction services category,” said Abie Cohen, a managing partner at the firm, as well as a board member of Accretus. “So, within real estate transaction services, we are starting with the qualified intermediary 1031 exchange services space, where there is certainly a distinct focus on technology and talent, and where Adam Friedman brings to bear a lot of unique elements of technical talent with a focus on this category.”

CSP’s limited partner base includes well over a dozen real estate investors, operators and family offices, including Simcha Hyman at TriEdge, Jonathan Leifer at L3C Capital, the Dushey family at Jenel Real Estate, and Aaron Jungreis at Rosewood Realty Group.

“The business is nearly 20 years old, and we’re thankful that there was an incredibly high-quality team — all of whom are sticking around through the acquisition — in play,” said Jonathan Kerstein, a CSP managing partner and president of Accretus, said of ADE. “While we are certainly investing in technology systems to underpin or maybe supercharge these high-quality team members, we like this business in large part because we feel it is so tax- and time-sensitive that the actual service providers are not at risk of AI displacement, but can be given lots more operating leverage by training technology on existing datasets and workflows that exist across the business.

CSP raised $50 million for its second fund, from which ADE is the first acquisition. The firm declined to disclose the funding amount to acquire ADE, but Kerstein described it as “a control transaction majority buyout.”

Accretus is planning to make further investments throughout the real estate sector, Kerstein said.

“We’ll certainly be expanding the suite of services that we provide to our clients over time where it makes sense along the real estate investment life cycle,” said Kerstein. “You might describe the companies we’re investing in as less likely to be categorized as proptech at the point of investment and more likely to be categorized as proptech at the point of exit, in large part driven by folks like Adam Friedman.”

Under Accretus, ADE plans to expand geographically beyond the Southeast, grow its team, and invest in operational infrastructure to better serve real estate investors and advisers across asset classes, transaction sizes and 1031 exchange types.

“ADE has spent decades earning the trust of our clients and their advisers through the dedication of our exceptional team, and I’m excited about the firm’s growth prospects under Centre Street Partners’ stewardship,” Ron Raitz, founder of Atlanta Deferred Exchange, said in a statement. “This is a significant moment for ADE, and Centre Street Partners and Adam are the ideal partners to take what we’ve built and scale it nationally. I’m proud to remain a shareholder and a board member for the exciting journey ahead.”

Philip Russo can be reached at prusso@commercialobserver.com.